A whole generation of aspirant home owner-occupiers may now be locked out of owning their own homes for some years to come, if not for their lifetimes.
A further sting in the tail is that, as far as they are concerned, house prices will now rise by some 21% by 2016 on the back of a lack of supply. This is despite mortgage lenders being choosier to whom they lend and asking for more of a deposit with the result that there is less money sloshing around for house buying.
The level of house building has also slumped to its lowest level for about 90 years.
Then there is the matter of rents; with increased demand the NHF says that rents will go up by 20% by 2016.
In London, the percentage ofÂ home owner-occupiers, which is currently 51.6%, is expected to fall to just 44% by 2021. Across England the percentage of owner-occupiers was 72.5% in 2001 and this is expected to fall to 63.8% by 2021.
David Orr, the NHF chief executive said “With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it’s time to face up to the fact that we have a totally dysfunctional housing market.”
“Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy.”
“And for the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels.”
And the answer is of course to build more homes for ordinary people to buy and live in. But this would mean allowing current house prices to be forced down quickly to an amount about equal to the average wage (Â£26,000) multiplied by three plus say 10%. So that would be in the region of say Â£85,800. We also need to seriously look at land value tax so that the one asset that provides for just about everything and cannot be whisked off to a tax haven is taxed properly. But which bank or powerful lobby with a vested interest would allow their asset and tax interests to be so affected?
Without more building of accommodation in the very near future coupled with a re-think on tax we will have more people squeezed into less space. More houses will be converted into microscopic rented flats and more people living in single rented out rooms. But this will be for the growing number of the poorer and more vulnerable of our citizens.
Is this the way we want our country to go?